King Pharmaceuticals Reports Strong Earnings Growth for First Quarter 2001

Apr 30, 2001, 01:00 ET from King Pharmaceuticals, Inc.

    BRISTOL, Tenn., April 30 /PRNewswire/ --
 King Pharmaceuticals, Inc. (NYSE:   KG) announced today that net earnings
 equaled $44.7 million for the first quarter ending March 31, 2001, up 50% from
 $29.9 million in the first quarter of 2000, excluding special charges recorded
 during the first quarter of 2000.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20010125/KGLOGO )
     Diluted earnings per share was $0.26 for the first quarter of 2001, up
 37% from $0.19 for the first quarter of 2000, excluding special charges
 recorded during the first quarter of 2000.
     King recorded merger and restructuring costs of $20.8 million during
 February 2000 related to King's merger with Medco Research, Inc. ("Medco") in
 a tax free pooling of interests.
     Revenues totaled $181.3 million for the first quarter ending March 31,
 2001, a 34% increase over the first quarter of 2000.
     The increase in first quarter revenues and net earnings is attributable
 primarily to the sales growth of certain significant branded pharmaceutical
 products, in particular, Altace(R) (ramipril) and Levoxyl(R) (levothyroxine
 sodium tablets, USP).  King's branded pharmaceutical products are marketed
 primarily by its wholly owned subsidiary, Monarch Pharmaceuticals, Inc.
     Net revenue from branded pharmaceuticals, including royalty income,
 totaled $172.6 million for the first quarter of 2001, a 36% increase over the
 first quarter of 2000.  For the first quarter ending March 31, 2001, revenue
 from contract manufacturing equaled $8.1 million, while remaining revenue,
 comprised primarily of generic sales, totaled $0.5 million.
     Altace(R) net sales grew to $56.4 million in the first quarter of 2001, a
 114% increase over the first quarter of 2000.  Altace(R) new prescriptions
 totaled approximately 559,000 and total prescriptions equaled approximately
 1,446,000 during the first quarter of 2001, increases of 67% and 65%
 respectively, over the first quarter of 2000, according to IMS America monthly
 prescription data.
     Levoxyl(R) net sales grew to $17.3 million in the first quarter of 2001, a
 17% increase over the first quarter of 2000.  As a result of Levoxyl(R)'s
 growth during the first quarter of 2001, King projects that estimated net
 sales of Levoxyl(R) in the second quarter ending June 30, 2001, should exceed
 net sales of the product in the first quarter of 2001.  Lorabid(R)
 (loracarbef) net sales totaled $14.2 million in the first quarter of 2001, a
 5% decrease from $15.0 million during the first quarter of the prior year.
     Net sales of Thrombin-JMI(R) (thrombin, topical, bovine, USP) totaled
 $11.4 million in the first quarter of 2001, a 13% increase from $10.1 million
 in the first quarter of the prior year.  Thrombin-JMI(R) sales during the
 first quarter of 2001 were impacted by volume discounting effected in relation
 to Thrombogen(R), a competing thrombin-based product, by Ethicon, Inc., a
 subsidiary of Johnson and Johnson Products, Inc., as Ethicon exits its
 Thrombogen(R) business.  As previously reported, King expects the Company's
 gross profit in 2001 to benefit from the expiration in October 2000 of the
 distribution agreement pursuant to which Jones Pharma Incorporated, a
 wholly-owned subsidiary of King, previously supplied Thrombogen(R) to Ethicon.
 Additionally, King projects that estimated net sales of the Company's product,
 Thrombin-JMI(R), in the second quarter ending June 30, 2001, should exceed net
 sales of Thrombin-JMI(R) in the first quarter of 2001, as a result of
 anticipated progress by Ethicon in depleting its inventory of Thrombogen(R) as
 Ethicon terminates such thrombin-based product business.
     Royalty revenues from Adenoscan(R) (adenosine) and Adenocard(R)
 (adenosine) totaled $11.4 million in the first quarter of 2001, a 10% decrease
 from $12.7 million during the first quarter of the prior year.  Combined net
 sales of Adenoscan(R) and Adenocard(R), on which King receives royalty
 revenues, in the first quarter of 2001 were approximately equal to such net
 sales in the first quarter of the prior year.
     Long-term debt decreased to $100.4 million as of March 31, 2001, from
 $496.2 million as of March 31, 2000.  As of March 31, 2001, cash and cash
 equivalents totaled approximately $169.1 million, up from $76.4 million as of
 December 31, 2000.  Net cash provided by operating activities equaled
 $95.8 million for the first quarter ending March 31, 2001.
     King currently projects the following ranges for estimated net sales of
 Altace(R), estimated total revenue, and estimated diluted earnings per share,
 before any special charges, on a quarterly and year-end basis for 2001, and
 year-end basis for 2002, generally in accordance with the Company's prior
 press release dated April 12, 2001, with the exception of upward revisions to
 estimated net sales of Altace(R), estimated total revenue, and estimated
 diluted earnings per share for year-end 2001 to reflect actual results for the
 first quarter of 2001 (dollars in millions, except EPS):
 
                   Second         Third      Fourth
                   quarter       quarter     quarter        2001        2002
                   ending        ending      ending
                   6/30/01       9/30/01    12/31/01
 
     Altace(R)
     net sales    $60 - 65      $70 - 75     $80 - 85   $266 - 282   $400 - 500
 
     Revenue    $180 - 190    $190 - 200   $220 - 230   $771 - 801  $950 - 1050
 
     Diluted
      EPS      $0.26- 0.27  $0.29 - 0.30 $0.37 - 0.38 $1.18 - 1.21 $1.40 - 1.48
 
     The foregoing projected range for estimated diluted earnings per share for
 the year ending December 31, 2001, has been revised in the preceding table
 upward from the prior projected range of $1.16 to $1.20 to reflect actual
 diluted earnings per share of $0.26 in the first quarter of 2001.  Likewise,
 the current projected range for estimated net sales of Altace(R) and estimated
 total revenue for year-end 2001 have been revised in the preceding table
 upward from the prior projected ranges of $262 million to $282 million and
 $765 million to $800 million, respectively, to reflect actual results in the
 first quarter of 2001.
     For purposes of the above projections, assumptions were made pertaining to
 the estimated number of shares used in computing the diluted earnings per
 share for each period as follows (in millions):
 
                  Second         Third         Fourth
                  quarter       quarter        quarter
                   ending        ending        ending
                  6/30/01      9/30/01       12/31/01      2001       2002
 
     Number of
      shares        173.6         173.6          173.8     173.5      174.0
 
     John M. Gregory, Chairman and Chief Executive Officer of King, stated, "We
 are very pleased with our strong first quarter results and sustained earnings
 and revenue growth in excess of our initial projections.  Moreover, based on
 King's positive performance during the first quarter arising from the
 continued organic growth of a broad spectrum of our branded pharmaceutical
 products, the Company raised its projected estimates for revenue and earnings
 per share for 2001."  Mr. Gregory added, "We remain very excited about the
 excellent growth potential of our largest product Altace(R).  Specifically, we
 continue to believe that Altace(R)'s new prescription market share among
 cardiologists of approximately 15.5%, which is approximately double that of
 Altace(R)'s new prescription market share among all physician groups according
 to IMS America data for the week ending April 13, 2001, provides a very
 positive lead indicator of the potential growth of Altace(R).  In fact, based
 on such IMS America data, Altace(R) has captured the second largest market
 share of new prescriptions written by cardiologists for ACE inhibitors.  New
 prescriptions for Altace(R) among cardiologists during the first quarter of
 2001 grew 98% in comparison to the first quarter of 2000 and 33% in comparison
 to the fourth quarter of 2000, according to IMS America data."
 
     The Company announced also today that Richard C. Williams has chosen to
 resign his position as Vice Chairman of Strategic Planning and as a member of
 the Board of Directors of King effective April 30, 2001, to pursue other
 corporate opportunities in the pharmaceutical industry.  The Company does not
 plan to fill the position of Vice Chairman of Strategic Planning being vacated
 by Mr. Williams.
 
     King will provide a live webcast of its conference call scheduled for
 today at 1:00 p.m., E.D.T. pertaining to this earnings announcement.
 Interested persons may listen to the conference call today, Monday, April 30,
 2001, at 1:00 p.m., E.D.T. at http://www.videonewswire.com/KING/043001/ or by
 dialing 1-800-235-0452 (US only) or 785-832-1077 (international), passcode KP.
 If you are unable to participate during the live webcast, the call will be
 archived on King's web site www.kingpharm.com for not less than 30 days
 following the call.  A replay of the conference call will also be available
 for not less than 30 days following the call by dialing 1-888-566-0175 (US
 only) or 402-530-9314 (international).
 
     King, headquartered in Bristol, Tennessee, is a vertically integrated
 pharmaceutical company that manufactures, markets, and sells primarily branded
 prescription pharmaceutical products.  King seeks to capitalize on
 opportunities in the pharmaceutical industry created by cost containment
 initiatives and consolidation among large global pharmaceutical companies.
 King's strategy is to acquire branded pharmaceutical products and to increase
 their sales by focused promotion and marketing and through product life cycle
 management.
 
     This release contains forward-looking statements which reflect
 management's current views of future events and operations, including, but not
 limited to, management's projections for net sales of Altace(R), revenue,
 earnings per share, and shares outstanding for the Company on a quarterly and
 year-end basis for 2001 and year-end basis for 2002, statements pertaining to
 the future growth potential of, and prescription trends for, Altace(R), and
 statements pertaining to the future growth potential of Levoxyl(R) and
 Thrombin-JMI(R) during the second quarter of 2001.  These forward-looking
 statements involve certain significant risks and uncertainties, and actual
 results may differ materially from the forward-looking statements.  Some
 important factors which may cause results to differ include:  dependence on
 King's and American Home Products' ability to successfully market Altace(R)
 under the co-promotion agreement between King and American Home Products,
 dependence on growth of net sales of King's branded pharmaceutical products,
 in particular, Altace(R), Levoxyl(R), and Thrombin-JMI(R), as well as revenue
 and earnings per share, at a rate equal to or in excess of management's
 projections, dependence on share count projections used in computing projected
 diluted earnings per share on a quarterly and year-end basis for 2001 and
 year-end basis for 2002, dependence on successful marketing and sales of
 King's products, including, in particular, but not limited to, Altace(R),
 Lorabid(R), Levoxyl(R), Thrombin-JMI(R), and Cytomel(R)/Triostat(R),
 dependence on royalty revenues from Adenoscan(R) and Adenocard(R), the actual
 timing of progress by Ethicon in depleting its inventory of its product
 Thrombogen(R) as Ethicon terminates such thrombin-based product business,
 management of King's growth and integration of its acquisitions, including but
 not limited to, King's merger with Jones Pharma Incorporated and King's merger
 with Medco, dependence on King's ability to continue to acquire branded
 products, and the high cost and uncertainty of research, clinical trials, and
 other development activities involving pharmaceutical products, including, but
 not limited to, King Pharmaceuticals Research and Development's pre-clinical
 and clinical pharmaceutical product development projects, including
 Binodisine, the unpredictability of the duration and results of the FDA's
 review of New Drug Applications and Investigational New Drug Applications
 and/or the review of other regulatory agencies worldwide, changes in general
 economic and business conditions, changes in current pricing levels,
 development of new competitive products, changes in economic conditions and
 federal and state regulations, and manufacturing capacity constraints.  Other
 important factors that may cause actual results to differ materially from the
 forward-looking statements are discussed in various sections of King's Form
 10-K for the year ended December 31, 2000, which is on file with the
 Securities and Exchange Commission.  King does not undertake to publicly
 update or revise any of its forward-looking statements even if experience or
 future changes show that the indicated results or events will not be realized.
 
 
                           KING PHARMACEUTICALS, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                           EXCLUDING SPECIAL CHARGES
                     (in thousands, except per share data)
 
                                                         Three Months Ended
                                                     March 31,       March 31,
                                                        2001            2000
                                                            (Unaudited)
 
     REVENUES:
      Total revenue                                 $ 181,317       $135,195
     OPERATING COSTS AND EXPENSES:
      Cost of revenue (including royalty
       expense of $2,847 and $2,425)                   37,416         30,375
      Selling, general and administrative              32,266         33,198
      Co-promotion fees                                17,464              0
      Co-promotion marketing expense                    5,529              0
      Depreciation and amortization                    11,375          9,277
      Research and development                          4,015          3,665
      Merger and restructuring costs                        0              0
       Total operating costs and expenses             108,065         76,515
 
     OPERATING INCOME                                  73,252         58,680
     OTHER (EXPENSES) INCOME
      Interest expense                                 (2,867)       (14,032)
      Interest income                                   2,509          4,021
      Other income (expense)                           (1,571)          (126)
       Total other (expenses)                          (1,929)       (10,137)
 
     INCOME BEFORE INCOME TAXES                        71,323         48,543
      Income tax expense                              (26,604)       (18,667)
     NET INCOME                                       $44,719        $29,876
 
     Basic income per common share                     $ 0.26          $0.19
 
     Diluted income per common share                   $ 0.26          $0.19
 
     Shares used in basic net income per share        171,047        156,771
 
     Shares used in diluted net income per share      173,003        160,396
 
 
                           KING PHARMACEUTICALS, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
 
                                                        Three Months Ended
                                                      March 31,      March 31,
                                                         2001           2000
                                                            (Unaudited)
 
     REVENUES:
      Total revenue                                 $ 181,317       $135,195
     OPERATING COSTS AND EXPENSES:
      Cost of revenue (including royalty expense
       of $2,847 and $2,425)                           37,416         30,375
      Selling, general and administrative              32,266         33,198
      Co-promotion fees                                17,464              0
      Co-promotion marketing expense                    5,529              0
      Depreciation and amortization                    11,375          9,277
      Research and development                          4,015          3,665
      Merger and restructuring costs                        0         20,789
      Total operating costs and expenses              108,065         97,304
 
     OPERATING INCOME                                  73,252         37,891
     OTHER (EXPENSES) INCOME
      Interest expense                                 (2,867)       (14,032)
      Interest income                                   2,509          4,021
     Other income (expense)                            (1,571)          (126)
       Total other (expenses)                          (1,929)       (10,137)
 
     INCOME BEFORE INCOME TAXES AND
      CUMULATIVE EFFECT OF ACCOUNTING CHANGE           71,323         27,754
      Income tax expense                              (26,604)       (17,958)
     INCOME BEFORE CUMULATIVE EFFECT
      OF ACCOUNTING CHANGE                             44,719          9,796
      Cumulative effect of accounting change,
       net of income taxes                               (545)             0
     NET INCOME                                       $44,174         $9,796
 
     Basic income per common share                     $ 0.26          $0.06
 
     Diluted income per common share                   $ 0.26          $0.06
 
     Shares used in basic net income per share        171,047        156,771
     Shares used in diluted net income per share      173,003        160,396
 
 
                           KING PHARMACEUTICALS, INC.
                           CONSOLIDATED BALANCE SHEET
                       (in thousands, except share data)
 
                                                    March 31,   December 31,
                                                         2001           2000
     ASSETS                                       (Unaudited)
     Current assets:
      Cash and cash equivalents                      $169,088        $76,395
      Accounts receivable, net                        116,381        120,702
      Inventory                                        80,590         65,089
      Deferred income taxes                            26,733         26,733
      Prepaid expenses and other assets                 6,670         28,324
       Total current assets                           399,462        317,243
     Property, plant and equipment, net               132,395        128,521
     Intangible assets, net                           780,429        790,324
     Other assets                                      45,154         46,307
       Total assets                                $1,357,440     $1,282,395
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
     Current portion of long-term debt                 $1,524         $1,527
     Accounts payable                                  14,959         25,010
     Accrued expenses                                  88,953         78,545
     Income taxes payable                              25,228              0
       Total current liabilities                      130,664        105,082
     Long-term debt
      Senior subordinated notes                        96,382         96,382
      Other                                             2,511          2,623
     Deferred income taxes                             16,989         16,989
     Other long-term liabilities                       71,064         73,586
       Total liabilities                              317,610        294,662
 
     Shareholders' equity
      Common shares no par value, 150,000,000 shares
       authorized, 171,270,232 and 170,841,178 shares
      issued and outstanding, respectively            666,871        658,948
     Retained earnings                                372,959        328,785
       Total shareholders' equity                   1,039,830        987,733
       Total liabilities and shareholders'
        equity                                     $1,357,440     $1,282,395
 
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SOURCE King Pharmaceuticals, Inc.
    BRISTOL, Tenn., April 30 /PRNewswire/ --
 King Pharmaceuticals, Inc. (NYSE:   KG) announced today that net earnings
 equaled $44.7 million for the first quarter ending March 31, 2001, up 50% from
 $29.9 million in the first quarter of 2000, excluding special charges recorded
 during the first quarter of 2000.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20010125/KGLOGO )
     Diluted earnings per share was $0.26 for the first quarter of 2001, up
 37% from $0.19 for the first quarter of 2000, excluding special charges
 recorded during the first quarter of 2000.
     King recorded merger and restructuring costs of $20.8 million during
 February 2000 related to King's merger with Medco Research, Inc. ("Medco") in
 a tax free pooling of interests.
     Revenues totaled $181.3 million for the first quarter ending March 31,
 2001, a 34% increase over the first quarter of 2000.
     The increase in first quarter revenues and net earnings is attributable
 primarily to the sales growth of certain significant branded pharmaceutical
 products, in particular, Altace(R) (ramipril) and Levoxyl(R) (levothyroxine
 sodium tablets, USP).  King's branded pharmaceutical products are marketed
 primarily by its wholly owned subsidiary, Monarch Pharmaceuticals, Inc.
     Net revenue from branded pharmaceuticals, including royalty income,
 totaled $172.6 million for the first quarter of 2001, a 36% increase over the
 first quarter of 2000.  For the first quarter ending March 31, 2001, revenue
 from contract manufacturing equaled $8.1 million, while remaining revenue,
 comprised primarily of generic sales, totaled $0.5 million.
     Altace(R) net sales grew to $56.4 million in the first quarter of 2001, a
 114% increase over the first quarter of 2000.  Altace(R) new prescriptions
 totaled approximately 559,000 and total prescriptions equaled approximately
 1,446,000 during the first quarter of 2001, increases of 67% and 65%
 respectively, over the first quarter of 2000, according to IMS America monthly
 prescription data.
     Levoxyl(R) net sales grew to $17.3 million in the first quarter of 2001, a
 17% increase over the first quarter of 2000.  As a result of Levoxyl(R)'s
 growth during the first quarter of 2001, King projects that estimated net
 sales of Levoxyl(R) in the second quarter ending June 30, 2001, should exceed
 net sales of the product in the first quarter of 2001.  Lorabid(R)
 (loracarbef) net sales totaled $14.2 million in the first quarter of 2001, a
 5% decrease from $15.0 million during the first quarter of the prior year.
     Net sales of Thrombin-JMI(R) (thrombin, topical, bovine, USP) totaled
 $11.4 million in the first quarter of 2001, a 13% increase from $10.1 million
 in the first quarter of the prior year.  Thrombin-JMI(R) sales during the
 first quarter of 2001 were impacted by volume discounting effected in relation
 to Thrombogen(R), a competing thrombin-based product, by Ethicon, Inc., a
 subsidiary of Johnson and Johnson Products, Inc., as Ethicon exits its
 Thrombogen(R) business.  As previously reported, King expects the Company's
 gross profit in 2001 to benefit from the expiration in October 2000 of the
 distribution agreement pursuant to which Jones Pharma Incorporated, a
 wholly-owned subsidiary of King, previously supplied Thrombogen(R) to Ethicon.
 Additionally, King projects that estimated net sales of the Company's product,
 Thrombin-JMI(R), in the second quarter ending June 30, 2001, should exceed net
 sales of Thrombin-JMI(R) in the first quarter of 2001, as a result of
 anticipated progress by Ethicon in depleting its inventory of Thrombogen(R) as
 Ethicon terminates such thrombin-based product business.
     Royalty revenues from Adenoscan(R) (adenosine) and Adenocard(R)
 (adenosine) totaled $11.4 million in the first quarter of 2001, a 10% decrease
 from $12.7 million during the first quarter of the prior year.  Combined net
 sales of Adenoscan(R) and Adenocard(R), on which King receives royalty
 revenues, in the first quarter of 2001 were approximately equal to such net
 sales in the first quarter of the prior year.
     Long-term debt decreased to $100.4 million as of March 31, 2001, from
 $496.2 million as of March 31, 2000.  As of March 31, 2001, cash and cash
 equivalents totaled approximately $169.1 million, up from $76.4 million as of
 December 31, 2000.  Net cash provided by operating activities equaled
 $95.8 million for the first quarter ending March 31, 2001.
     King currently projects the following ranges for estimated net sales of
 Altace(R), estimated total revenue, and estimated diluted earnings per share,
 before any special charges, on a quarterly and year-end basis for 2001, and
 year-end basis for 2002, generally in accordance with the Company's prior
 press release dated April 12, 2001, with the exception of upward revisions to
 estimated net sales of Altace(R), estimated total revenue, and estimated
 diluted earnings per share for year-end 2001 to reflect actual results for the
 first quarter of 2001 (dollars in millions, except EPS):
 
                   Second         Third      Fourth
                   quarter       quarter     quarter        2001        2002
                   ending        ending      ending
                   6/30/01       9/30/01    12/31/01
 
     Altace(R)
     net sales    $60 - 65      $70 - 75     $80 - 85   $266 - 282   $400 - 500
 
     Revenue    $180 - 190    $190 - 200   $220 - 230   $771 - 801  $950 - 1050
 
     Diluted
      EPS      $0.26- 0.27  $0.29 - 0.30 $0.37 - 0.38 $1.18 - 1.21 $1.40 - 1.48
 
     The foregoing projected range for estimated diluted earnings per share for
 the year ending December 31, 2001, has been revised in the preceding table
 upward from the prior projected range of $1.16 to $1.20 to reflect actual
 diluted earnings per share of $0.26 in the first quarter of 2001.  Likewise,
 the current projected range for estimated net sales of Altace(R) and estimated
 total revenue for year-end 2001 have been revised in the preceding table
 upward from the prior projected ranges of $262 million to $282 million and
 $765 million to $800 million, respectively, to reflect actual results in the
 first quarter of 2001.
     For purposes of the above projections, assumptions were made pertaining to
 the estimated number of shares used in computing the diluted earnings per
 share for each period as follows (in millions):
 
                  Second         Third         Fourth
                  quarter       quarter        quarter
                   ending        ending        ending
                  6/30/01      9/30/01       12/31/01      2001       2002
 
     Number of
      shares        173.6         173.6          173.8     173.5      174.0
 
     John M. Gregory, Chairman and Chief Executive Officer of King, stated, "We
 are very pleased with our strong first quarter results and sustained earnings
 and revenue growth in excess of our initial projections.  Moreover, based on
 King's positive performance during the first quarter arising from the
 continued organic growth of a broad spectrum of our branded pharmaceutical
 products, the Company raised its projected estimates for revenue and earnings
 per share for 2001."  Mr. Gregory added, "We remain very excited about the
 excellent growth potential of our largest product Altace(R).  Specifically, we
 continue to believe that Altace(R)'s new prescription market share among
 cardiologists of approximately 15.5%, which is approximately double that of
 Altace(R)'s new prescription market share among all physician groups according
 to IMS America data for the week ending April 13, 2001, provides a very
 positive lead indicator of the potential growth of Altace(R).  In fact, based
 on such IMS America data, Altace(R) has captured the second largest market
 share of new prescriptions written by cardiologists for ACE inhibitors.  New
 prescriptions for Altace(R) among cardiologists during the first quarter of
 2001 grew 98% in comparison to the first quarter of 2000 and 33% in comparison
 to the fourth quarter of 2000, according to IMS America data."
 
     The Company announced also today that Richard C. Williams has chosen to
 resign his position as Vice Chairman of Strategic Planning and as a member of
 the Board of Directors of King effective April 30, 2001, to pursue other
 corporate opportunities in the pharmaceutical industry.  The Company does not
 plan to fill the position of Vice Chairman of Strategic Planning being vacated
 by Mr. Williams.
 
     King will provide a live webcast of its conference call scheduled for
 today at 1:00 p.m., E.D.T. pertaining to this earnings announcement.
 Interested persons may listen to the conference call today, Monday, April 30,
 2001, at 1:00 p.m., E.D.T. at http://www.videonewswire.com/KING/043001/ or by
 dialing 1-800-235-0452 (US only) or 785-832-1077 (international), passcode KP.
 If you are unable to participate during the live webcast, the call will be
 archived on King's web site www.kingpharm.com for not less than 30 days
 following the call.  A replay of the conference call will also be available
 for not less than 30 days following the call by dialing 1-888-566-0175 (US
 only) or 402-530-9314 (international).
 
     King, headquartered in Bristol, Tennessee, is a vertically integrated
 pharmaceutical company that manufactures, markets, and sells primarily branded
 prescription pharmaceutical products.  King seeks to capitalize on
 opportunities in the pharmaceutical industry created by cost containment
 initiatives and consolidation among large global pharmaceutical companies.
 King's strategy is to acquire branded pharmaceutical products and to increase
 their sales by focused promotion and marketing and through product life cycle
 management.
 
     This release contains forward-looking statements which reflect
 management's current views of future events and operations, including, but not
 limited to, management's projections for net sales of Altace(R), revenue,
 earnings per share, and shares outstanding for the Company on a quarterly and
 year-end basis for 2001 and year-end basis for 2002, statements pertaining to
 the future growth potential of, and prescription trends for, Altace(R), and
 statements pertaining to the future growth potential of Levoxyl(R) and
 Thrombin-JMI(R) during the second quarter of 2001.  These forward-looking
 statements involve certain significant risks and uncertainties, and actual
 results may differ materially from the forward-looking statements.  Some
 important factors which may cause results to differ include:  dependence on
 King's and American Home Products' ability to successfully market Altace(R)
 under the co-promotion agreement between King and American Home Products,
 dependence on growth of net sales of King's branded pharmaceutical products,
 in particular, Altace(R), Levoxyl(R), and Thrombin-JMI(R), as well as revenue
 and earnings per share, at a rate equal to or in excess of management's
 projections, dependence on share count projections used in computing projected
 diluted earnings per share on a quarterly and year-end basis for 2001 and
 year-end basis for 2002, dependence on successful marketing and sales of
 King's products, including, in particular, but not limited to, Altace(R),
 Lorabid(R), Levoxyl(R), Thrombin-JMI(R), and Cytomel(R)/Triostat(R),
 dependence on royalty revenues from Adenoscan(R) and Adenocard(R), the actual
 timing of progress by Ethicon in depleting its inventory of its product
 Thrombogen(R) as Ethicon terminates such thrombin-based product business,
 management of King's growth and integration of its acquisitions, including but
 not limited to, King's merger with Jones Pharma Incorporated and King's merger
 with Medco, dependence on King's ability to continue to acquire branded
 products, and the high cost and uncertainty of research, clinical trials, and
 other development activities involving pharmaceutical products, including, but
 not limited to, King Pharmaceuticals Research and Development's pre-clinical
 and clinical pharmaceutical product development projects, including
 Binodisine, the unpredictability of the duration and results of the FDA's
 review of New Drug Applications and Investigational New Drug Applications
 and/or the review of other regulatory agencies worldwide, changes in general
 economic and business conditions, changes in current pricing levels,
 development of new competitive products, changes in economic conditions and
 federal and state regulations, and manufacturing capacity constraints.  Other
 important factors that may cause actual results to differ materially from the
 forward-looking statements are discussed in various sections of King's Form
 10-K for the year ended December 31, 2000, which is on file with the
 Securities and Exchange Commission.  King does not undertake to publicly
 update or revise any of its forward-looking statements even if experience or
 future changes show that the indicated results or events will not be realized.
 
 
                           KING PHARMACEUTICALS, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                           EXCLUDING SPECIAL CHARGES
                     (in thousands, except per share data)
 
                                                         Three Months Ended
                                                     March 31,       March 31,
                                                        2001            2000
                                                            (Unaudited)
 
     REVENUES:
      Total revenue                                 $ 181,317       $135,195
     OPERATING COSTS AND EXPENSES:
      Cost of revenue (including royalty
       expense of $2,847 and $2,425)                   37,416         30,375
      Selling, general and administrative              32,266         33,198
      Co-promotion fees                                17,464              0
      Co-promotion marketing expense                    5,529              0
      Depreciation and amortization                    11,375          9,277
      Research and development                          4,015          3,665
      Merger and restructuring costs                        0              0
       Total operating costs and expenses             108,065         76,515
 
     OPERATING INCOME                                  73,252         58,680
     OTHER (EXPENSES) INCOME
      Interest expense                                 (2,867)       (14,032)
      Interest income                                   2,509          4,021
      Other income (expense)                           (1,571)          (126)
       Total other (expenses)                          (1,929)       (10,137)
 
     INCOME BEFORE INCOME TAXES                        71,323         48,543
      Income tax expense                              (26,604)       (18,667)
     NET INCOME                                       $44,719        $29,876
 
     Basic income per common share                     $ 0.26          $0.19
 
     Diluted income per common share                   $ 0.26          $0.19
 
     Shares used in basic net income per share        171,047        156,771
 
     Shares used in diluted net income per share      173,003        160,396
 
 
                           KING PHARMACEUTICALS, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
 
                                                        Three Months Ended
                                                      March 31,      March 31,
                                                         2001           2000
                                                            (Unaudited)
 
     REVENUES:
      Total revenue                                 $ 181,317       $135,195
     OPERATING COSTS AND EXPENSES:
      Cost of revenue (including royalty expense
       of $2,847 and $2,425)                           37,416         30,375
      Selling, general and administrative              32,266         33,198
      Co-promotion fees                                17,464              0
      Co-promotion marketing expense                    5,529              0
      Depreciation and amortization                    11,375          9,277
      Research and development                          4,015          3,665
      Merger and restructuring costs                        0         20,789
      Total operating costs and expenses              108,065         97,304
 
     OPERATING INCOME                                  73,252         37,891
     OTHER (EXPENSES) INCOME
      Interest expense                                 (2,867)       (14,032)
      Interest income                                   2,509          4,021
     Other income (expense)                            (1,571)          (126)
       Total other (expenses)                          (1,929)       (10,137)
 
     INCOME BEFORE INCOME TAXES AND
      CUMULATIVE EFFECT OF ACCOUNTING CHANGE           71,323         27,754
      Income tax expense                              (26,604)       (17,958)
     INCOME BEFORE CUMULATIVE EFFECT
      OF ACCOUNTING CHANGE                             44,719          9,796
      Cumulative effect of accounting change,
       net of income taxes                               (545)             0
     NET INCOME                                       $44,174         $9,796
 
     Basic income per common share                     $ 0.26          $0.06
 
     Diluted income per common share                   $ 0.26          $0.06
 
     Shares used in basic net income per share        171,047        156,771
     Shares used in diluted net income per share      173,003        160,396
 
 
                           KING PHARMACEUTICALS, INC.
                           CONSOLIDATED BALANCE SHEET
                       (in thousands, except share data)
 
                                                    March 31,   December 31,
                                                         2001           2000
     ASSETS                                       (Unaudited)
     Current assets:
      Cash and cash equivalents                      $169,088        $76,395
      Accounts receivable, net                        116,381        120,702
      Inventory                                        80,590         65,089
      Deferred income taxes                            26,733         26,733
      Prepaid expenses and other assets                 6,670         28,324
       Total current assets                           399,462        317,243
     Property, plant and equipment, net               132,395        128,521
     Intangible assets, net                           780,429        790,324
     Other assets                                      45,154         46,307
       Total assets                                $1,357,440     $1,282,395
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
     Current portion of long-term debt                 $1,524         $1,527
     Accounts payable                                  14,959         25,010
     Accrued expenses                                  88,953         78,545
     Income taxes payable                              25,228              0
       Total current liabilities                      130,664        105,082
     Long-term debt
      Senior subordinated notes                        96,382         96,382
      Other                                             2,511          2,623
     Deferred income taxes                             16,989         16,989
     Other long-term liabilities                       71,064         73,586
       Total liabilities                              317,610        294,662
 
     Shareholders' equity
      Common shares no par value, 150,000,000 shares
       authorized, 171,270,232 and 170,841,178 shares
      issued and outstanding, respectively            666,871        658,948
     Retained earnings                                372,959        328,785
       Total shareholders' equity                   1,039,830        987,733
       Total liabilities and shareholders'
        equity                                     $1,357,440     $1,282,395
 
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 SOURCE  King Pharmaceuticals, Inc.